J.P. Morgan’s weekly analysis of European high-yield funds shows a €190 million inflow for the week ended Jan. 22. This includes net inflows for ETFs and short-duration funds of €10 million and €77 million, respectively. The latest reading marks the 20th consecutive weekly inflow. The reading for the week ended Jan. 15 is revised from a €222 million inflow to a €215 million inflow.
The provisional reading for December is a €1.39 billion inflow, meaning the provisional 2013 inflow is €8.22 billion. That compares to an inflow of €7.2 billion for 2012.
Ongoing inflows and limited supply have led to rampant demand for new issues this year. Last week saw the first single-B rated deals emerge, from Play and Autodistribution, and books for these transactions were massively oversubscribed – the latter by as much as 15x – as investors scrambled to put money to work. Supply is expected to pick up this week, though at present there is only HSS and Bond Aviation in the live pipeline. A consequence of reasonably light supply has been retail investors looking elsewhere for returns. This is highlighted by the proportion of the weekly inflow that went into ETFs, which dropped to just 5%, versus 20%-plus for each of the last four weeks.
In the U.S., retail cash inflows from high-yield totalled $423 million for the week ended Jan. 22, according to Lipper, a division of Thomson Reuters. That’s an increase from inflows of $65 million the week before, and it extends the inflow streak to three weeks for a total of $1.23 billion, by the weekly reporters only. Flows to mutual funds and ETFs were fairly balanced this past week, at 58% and 42%, respectively. The year through Jan. 22 net inflow is $486 million, reflecting $652 million of mutual fund inflows, versus $166 million of redemptions from ETFs.
Meanwhile, retail cash inflows to bank loan mutual funds and exchange-traded funds totalled $804 million for the week ended Jan. 22, according to Lipper. That total is down from inflows of $1.05 billion the week prior, but extends the net inflow streak to 84 weeks for a total of $62.3 billion over that period. Inflows for the year through Jan. 22 total $2.9 billion.
As reported, J.P. Morgan only calculates flows for funds that publish daily or weekly updates of their net asset value and total fund assets. As a result, J.P. Morgan’s weekly analysis looks at around 50 funds, with total assets under management of €10 billion. Its monthly analysis takes in a larger universe of 90 funds, with €27 billion of assets under management. For a full analysis, please see “Europe receives HY fund flow calculation.” – Luke Millar